Individuals with social phobia are less educated, less likely to be married, and are of a lower socioeconomic status (Schneier et al, 1992; Stein & Kean, 2000). Public speaking appears to be the most commonly feared social situation among socially phobic individuals, as well as the general population. Cognitive-behavioral treatments for social anxiety are effective, although exposure to public speaking fears is difficult to arrange unless done in the context of group therapy. A virtual audience as a tool for exposure therapy has the potential to reduce the burden on the therapist in arranging exposures and to offer an alternative for individuals who do not want group therapy. The utilization of a virtual audience represents a significant advance in the use of virtual reality for virtual reality exposure therapy (VRE) in the treatment of anxiety because it is the first attempt to use virtual reality to treat an interpersonal fear. During Phase I, a virtual small group audience and virtual large group audience was developed, and a treatment manual was written and utilized within an open clinical trial (N=10). After treatment, participants reported significant reductions in public speaking fears, as measured by standardized questionnaires. During a post-treatment speech to an actual audience, participants were rated as performing better and looking less anxious than during a pretreatment speech. This STTR Phase II project aims to revise the virtual audience, revise the treatment manual and to employ a randomized clinical trial to compare virtual reality exposure therapy to an empirically supported exposure group treatment and a wait list control group (WL) for the treatment of public speaking anxiety (N=75). Standardized treatment, independent assessment, homogenous DSM-IV inclusion criteria, and randomized assignment to treatment will assure a methodologically rigorous study. Furthermore, the treatment study will take place at a site independent from the site where the virtual audience was developed.